Trades glossary, in plain English

Bill of Quantities (BOQ)

An itemised breakdown of every quantity of material and labour a job needs. Used on commercial builds so multiple trades can quote the same scope.

Call-out Fee

A fixed minimum charge to attend a site, regardless of whether work is performed. Covers your time, travel, and the cost of the first 15-30 minutes on site.

Day Rate

A fixed price for one day of your labour. Used when the scope is unclear, when work is exploratory, or for time-and-materials jobs.

Daywork

Work billed at agreed daily rates for labour, plant, and materials when the scope can't be quoted upfront. Used for unexpected extras on contracted jobs.

Defects Liability Period

The period after practical completion (typically 6-12 months) where the contractor must fix defects in their work at no extra cost.

Deposit

An upfront payment the customer makes on acceptance, typically 20-50 percent. Covers your material outlay and commits the customer to the booking.

GST (Goods and Services Tax)

A consumption tax in Australia, New Zealand, Canada, and India. Equivalent to VAT. Registered businesses charge it on every invoice and remit it.

Holdback

The portion of a contractor's progress payment the customer retains by law until lien rights expire. Typical in Canada and parts of the US.

Invoice

A formal request for payment after work is done. Lists what was delivered, the price agreed, banking details, and the due date.

Lien (Builder's / Mechanic's)

A legal claim a contractor can place against a property for unpaid work. Forces the customer to settle before the property can be sold or refinanced.

Liquidated Damages

A pre-agreed daily or weekly penalty charged to the contractor if the project runs past the contractual completion date. Common on commercial builds.

Markup vs Margin

Markup is the percentage you add to your cost. Margin is the percentage of the final price that is profit. They are not the same number.

Mobilisation

The cost of getting equipment, crew, and supplies to site for the start of a project. Often quoted as its own line on major works.

Payment Terms

The agreement on when an invoice must be paid. Standard wording like 'Net 7' means 7 days from invoice date.

Preliminaries (P&G)

Site setup costs that aren't billable as work itself: scaffold, fencing, signage, site office, water, power, supervision. Quoted as a separate lump sum.

Progress Payment

A staged invoice issued during a longer project, billed against milestones or a percentage-complete basis rather than waiting for the entire job to finish.

Provisional Sum

An allowance for work that cannot be exactly quoted when the contract is signed. Reconciled to the actual cost via a variation later.

Purchase Order (PO)

A document the customer issues authorising you to do work and committing to pay. Commercial customers reference PO numbers on every invoice.

Quote

A written proposal stating what work you will do and what you will charge. It is binding once the customer accepts it in writing.

Retention

A percentage of each progress payment the customer holds back until the job is complete and defects-liability has expired. Standard on commercial work.

Scope of Work

A precise list of what the quote covers and what it does not. Protects you from scope creep and protects the customer from surprise charges.

Snag List

A list of small defects identified at practical completion that must be fixed before the job is signed off as complete and the final payment released.

Variation Order

A written change to the agreed scope, raised when the customer asks for extra work after acceptance. Quoted, accepted, and added as its own line.

VAT (Value Added Tax)

A consumption tax on goods and services in the UK, EU, and South Africa. Registered businesses charge it on every invoice and remit it to the tax authority.